Tax Dodgers

 HMRC (Revenue and Customs) claims £36bn was lost to the exchequer last year simply because people do not pay their tax. Shockingly, that figure is £5bn higher than that lost in the previous year. It represents a third of total government spending on education...

We also know that £36bn is a very conservative estimate of the gap between what the exchequer does collect and what is due - what is known as the tax gap. For instance, many wealthy individuals  hide their assets in secret trusts they set up overseas in British tax havens, and pay no tax on that hidden wealth.

Furthermore, the tax gap does not start to take account of the billions lost each year when global companies such as Google, Facebook and Microsoft avoid tax  by creating financial structures that have no other purpose than to avoid paying tax.

Duty Paid
Ralph Hedley (1848-1913)
Photo Credit: Sunderland Museum & Winter Gardens [CC BY-NC]

Paying tax is central to the values that we all sign up to in society. If society is to function peacefully and well, we must all agree to abide by a set of rules that enable us to live together. One such rule is that we all contribute, according to our income and our wealth, to the common pot for the common good...

Many tax dodgers do not dream up the schemes they exploit to avoid paying tax on their own. They are advised by an army of people - accountants, lawyers, bankers and others working in the financial services sector. In 2017, the government created a new criminal offence whereby a company can be prosecuted if it fails to prevent its employees facilitating tax evasion... But the government has failed to prosecute a single person under it. If people know they will not be prosecuted they carry on behaving badly. Failure to enforce the law makes a mockery of the law...

(Margaret Hodge, The Guardian, 2024)

Taxes are the means whereby we have a health service that is free at the point of entry. Taxes pay for the education of nearly all UK children. They are the essential element in all of our public services.

Tax havens that feature prominently are the British Virgin Islands, the Cayman Islands and Bermuda. The unit which investigates offshore, corporate and wealthy taxpayers has been reduced by at least a half in the last five years. Criminal convictions fell from 808 to 218 in the same period.